 Okay, very good morning to everyone and happy Valentine's Day so Just a quick heads up for the fellas out there. Don't forget to To stop off at the petrol garage on the way home pick up some cheap cheap bottle of plonk and some flowers for your missus You can thank me later for the reminder But just having a quick look back to markets then what have we got on the agenda for the briefings So a bit of an update on the virus We're going to talk about German GDP that's just come out and that's the precursor then for the eurozone number And then we've got what happened surprisingly yesterday, which was The stepping down of Suji Javid the UK Chancellor So we'll have a little talk about what does that mean of potentially for UK assets and the UK government and Brexit and Then there's quite a busy calendar for today So just to run through some of the data points and so on Don't to look out for and then I'll hand you over to Sam to look at the charts from a technical perspective. So Starting off then just quickly talking about the virus Quite interestingly Who Bay so the main kind of epicenter if you like of the the red blob so if we were to zoom in here You probably know the lay of the land quite well now having looked at this number of times So there's Wuhan just on the right hand side And Reported cases were up about almost five thousand remember it was just around 60k yesterday, but the actual death toll has been revised down It's not if the people have been magically revived back to life Actually, I just lowered the number. So still obviously quite questionable. These numbers aren't really accurate We all know that they're kind of rough guidelines to go with But the idea here being that if you're actually looking at the sensitivity of markets as of today to this It's still relatively benign. I would say yesterday a little bit of a sell-off But if you look at those US equity charts from really what was the pattern of price activity from yesterday Other than the morning sell-off that we had soon as the Americans came in we just started rallying back higher again And I do think that there are You know from my experience having gone through say the sovereign crisis does Kind of reminiscent of this similar type of price action where different geographic regions have different interpretations and Certainly for America where there's these primaries going on there's Trump obviously lots of activity as per usual There's economic data that's been pretty strong as corporate earnings coming out You know unless the number in America of these cases, which you know if I just flip over my screen Remember USA had quite a few cases initially right when the outbreak was beginning and that number really has not changed one bit And so for the American market I think the psyche there as per Generally and the reason why I mentioned the sovereign crisis a few years back was that you'd get this big kind of maybe European reaction to a subject matter the Americans would come in and the less really it was getting to the point of mass Escalation of an issue they were just so much more focused on their domestic Kind of information and I do think that's a little bit the case at the moment. It's kind of this the situation in China obviously is Meaningful but as far as the Americans are concerned and I think the price action yesterday kind of reflects that it's just They're focused on other things and on the pecking order of that hierarchy of the most Market-moving factors. It's clear and present a danger But it's not the biggest one and these other poor positive things are beating it out at the moment So still to be monitored the corona virus But again as I said looking at global stocks as a whole summary as a kind of a collection of indices Generally wrap about a percent overall. We're heading for the second weekly game So despite the kind of usual regular intensity on the subjects global markets Barring the exception of some of the mainland perhaps But even that the Shanghai and Hangsang up again overnight only the Japanese market was a little lower in the Asia session so Moving on what have we had this morning? There's been a couple things if I just quickly flip over my chart We actually have had already the German GDP figure and came in at zero But if you remember the chart that I was showing you from the graphic that I had in the Macro menu Report that I issue on a Monday at that point in time the analyst expectation was for minus 0.2 remember we was talking about in previous briefings this idea of the second Kind of period of contraction in three. Well actually then zero is pretty good Not not so much of a bad thing. I mean obviously logically speaking in Germany stagnating is not good But comparative to how downbeat and bearish generally people have been on Germany It could have been a lot worse So actually when you look at the the euro dollar chart if I quickly just flip over here to the euro dollar currency pair And if you go to 7 a.m. When this data came out there was close to zero Reaction in if anything if you look at it on a shorter time frame the euro went up And I think that's fairly reasonable in the short term overall I don't think it really detracts from the trend that euro dollar is presently in and if I put euro dollar back on a daily Continuation chart remember what we were looking at yesterday We were basically had confirmed the break of that summer low in euro and we were talking about again This euro dollar chart is completely unaltered So the the the rectangle boxes that we've got there are the same We've had for a number of days and you can see how technical the market is, you know You have these little blips Let's say of isolated information, but the overall narrative hasn't changed at this point in time The fundamentals are still that the dollar strength and euro weakness And so then it's just about being patient and as per that line at the 108 52 here in euro dollar Which was those previous highs that we had I think this is what Sam often refers to as the macron gap up on that first round of the French elections back in April of 2017 we've hit that to the tick and and so again Just patience if you are holding that medium term position all things being equal on the top level those dynamics for this currency pair Have not changed and and then here we are down at that point So a good hold to these levels if you were if you were in that trade over a slightly longer time frame This does lead us up then to the eurozone number that's going to come out a little bit later on this morning I don't think there's going to be too much Emphasis on this to be honest having had Germany at flat I'd be expecting this broadly to be in line then with expectations to remain probably around point one From a range Perspective on that piece of data the flash GP coming out the eurozone the range is flat to point two So if we did get a flat reading what if we've got a surprise and a negative reading not sure statistically if that is even Possible given the German sitting right at zero But if we did then you know a retest down at the lower bound of the range that's been in place it's the overnight Asia-Pacific session on the euro could lead to a bit of a rundown an extension down to the S1 Okay, moving on quick look at the UK Because I remember I was delivered delivering a lecture yesterday when this actually came out And this was a bit of a bit of a shock really it was talking this time yesterday about how Suji Javid Dominic Rab these types of characters who sit in the most influential seats in in the cabinet in the UK government were pretty safe It was supposed to be a bit more of a formality for them Absolutely wasn't the case for Suji Javid apparently kind of cornered by the PM and and Dominic Cummings to fire some of his staff in order to more align Basically, Suji Javid's own personal treasury team with that of the Prime Minister's economic advisers to bring them more aligned so I Would imagine then so Dominic Cummings can have more direct control over exactly what it is that they're doing and the Treasury is a lot more better equipped in terms of the size and depth Let's say of the department in that sense. So what you would want then is Suji Javid on board but obviously he was reluctant to fire some of his staff stuck by his guns and so he resigned So what does this mean then going forward? Well a couple of different things his replacement is quite key And the impact so let's talk about the replacement first which is this chap here You probably would recognize him if you were if you were semi plugged in to the Political debates that were happening on TV. He deputized if you like for Boris Johnson in those leadership debates You remember the first couple of rounds. We had an ITV and BBC, you know Boris didn't even turn up That was how confident he was he sent in his kind of His next in command on the on the televised stage and I'd say Rishi Sunak did a pretty decent job I don't think many people were actually that aware of who he was He's only 39 years old and he's risen through the ranks pretty quickly only coming to kind of front bench positions over the last couple of years Who is he? Well, he's a he's a former Goldman Sachs employee Haven't actually managed to see what exactly his role was so I don't know whether He was an intern or whether he actually had a bona fide role of seniority or not I can't really tell you at this point But the key differences here is his Javid was seen as a fiscal hawk Whereas Sunak is seen much more aligned with Boris and Cummings giving his stance on Brexit So gee Javid was a remainder Whereas this chap here were voted to leave His voting history in terms of all the different parts of legislation that we've had to do with Brexit another Debates in in the lower house. He basically has been an ardent Brexiteer Supports reductions in corporation tax cuts to capital gains tax He's gone on the record in favor of infrastructure investment All of these things then would be much more aligned with the government that would mimic then a little bit more of an approach of Fiscal stimulus in a Trump-esque style in order to see you know the economy flourish The opposite then of a fiscal hawk, which would be tightening the belt to make sure that you can afford these changes. So As per usual with this type of chap I mean obviously people who voted for Brexite and Middle England were voting for you know Parliament to represent the normal man in the street So just like Boris and all the others this chap went to one of the most expensive prestigious private schools in Britain studied at Oxford went to Stanford University And he's married the billionaire daughter of the Indian oligarch of emphasis So yeah, just like you and me a nice representative of the man on street But I'll leave my political persuasions aside The main thing that this does mean though is what does it mean for markets? Well This is the yield on the UK 10-year government bond And actually if you see a bit of an uptick here, it's quite interesting because ultimately Yields rising to their higher since January after jab Javid left You know, this is that idea this notion then that Boris can start kind of changing the game a little bit under the parent direction of Cummings and look to tie everything together and again having everyone on board with that same View where they can pull the strings from one direction and one place. I think is is quite strategic in that way okay Going to have a quick overview of the calendar and a few things to cover off We've already talked about the data forthcoming in a short while at 10 o'clock Going into the US session though. It is pretty busy today. You do have US retail sales coming out there your major 130 data release You've then got industrial manufacturing Data from the US business inventories. You've got the preliminary University of Michigan sentiment number then for any oil Traders, they've got the Baker Hughes Rick count as well Pretty light on the ground in terms of speakers We do have a B. O. J. member speaking London time at 10 a.m. You got feds Mester a voter leaning Hawke speaking late afternoon 445 p.m. London time Terms of some of the equity movers for this morning We've had AstraZeneca and RBS out of the UK just having a look at some of the actual movers here at the open RBS is seen down about 2.7 AstraZeneca down about 3.4 Renault is down about 2.6 the outperformer this morning EDF is up about 7% One final interesting comment as well that was just made a short while ago Bank of England Governor Mark Carney, even though he's outgoing. I do think it was quite interesting in the sense that he said Central banks may have to look through one or two quarters of data due to coronavirus impact is seeing UK business Confidence rebound some firming up of consumer confidence the thing that I thought was quite interesting about the Carney comment Where was that even though he's outgoing? I think that that's pretty much a tactic that will be deployed by most of the central bankers So the ECB the Federal Reserve and so on this idea that these central banks have to look through One or two quarters of data meaning then that the likelihood of any near-term policy changes or tweaks I would say is probably minimal because it's only then that they've got to see them Well, what is the underlying performance of the economy once you kind of X out the impact and the repricing in of the? coronavirus So yeah, just thought I'd add that point in okay, I'm gonna hand you over to Sam Just bear with me one moment Okay, how'd you ever Sam? I wish you a good weekend. I'll see you in the chat room. Thanks so much guys Good morning, and happy Valentine's Day to everyone. Let's have a quick look over How things are going to get stuck with that with stocks overnight Asia drifted higher China finishing up for the week just Let's have a quick look at How we've we've traded you can see late last night and this has actually been the Way these markets traded in some there has been some decent moves into into the close And yes, they can see after we did break higher We came back to test what was the previous higher the day and that's acted as a flaw To a move to the upside so keep a watch on that around 33 72 It was what we were saying Yes, there's a decent line in the sand for balls and bears and you can see once we go Above it the bulls took over so for me That's again the line in the sand today hold that up We're just trending lower from the the high that we've got so keep that on Let's get a little trend line on there although not quite yet the the free test that you would like to see Just keep a watch to see how how that holds out, but it's onto a 15 minute chart to get a couple of lows in the mix as well 3380 you could argue that could be maybe a short-term flaw or at least a level of interest So to have marked up and then you're really looking down towards 33 60 if that pivot was to go I'd say that would be another area to consider the low that we got to yesterday just about Reaching the the high that we had in the 10th will be it not quite And those really be the levels that I'd focus on same situation for now on the next thing as well Gold yesterday as we said started well pushed higher and then was really chopping in a range and This would be still the the lower part of that that I'd focus on 15 75 and a half Keep that marked on and then the the highs that we just couldn't really get through at all I was doing a trade review yesterday around Half three four o'clock and we were saying that it was looking like this level was going to hold and it held again at 115 so definitely had that marked up to the upside 15 81 on that worth noting Fridays this year Have been the worst day of the week for stocks and that could be Helpful for gold to push to the upside and just bringing this into the bigger picture It is quite a key resistance zone going back to here to levels not traded since the well other than yesterday Of course the the fourth of the month and then above that 15 85 could be the level to target As well, I know we're not near the low at the moment But if we were to push down against stocks pushing hard could be the reason for that Probably worth is getting on this trend line again You can see here on the 12th the both the morning and the afternoon before hitting it again Not too long ago around half seven is guiding price price quite nicely So if we were to break that to it downside, you can see a quicker move lower the currencies Well, as we know euro has been pushing lower Again today you have the pivot with an area of Resistance from a previous day i.e. yesterday. That's actually just so well really hasn't I mean look at you know If you go back to yesterday fantastic you then break the pivot in the the afternoon on the What day would that be Wednesday acts as good resistance level Tuesday? We don't quite make it but give or take a one tick or two and and that holds up fantastically well and previous days you can just see what What a point to basically go short if it hits the pivot you're underneath go short or if it's above and you and you break below it And you go short as well, and you'd be very very happy Today or well every day really ruin a bit of a range So you got our you know think about that that pivot level is a place to go short to continue the trend If we break out the little range that we're into the downside of course start thinking about bigger moves and mark up the level from Macron's gap As you know, I quite like to keep saying that There as well. So, you know not too much going on now And I got the data coming out in not too long That could really be the main driver here So that's something I would keep an eye on but pivot for me looks pretty good if that was to fail Which it hasn't really in a while then you could get a quicker rally. I know it's a relatively small range still but 108 86 could be the level that that looks to come into As well the pound. What are they you say for the balls? Is that going to continue or not? I think moves like this we're getting the fib on since there's any potential levels to get in lowered down If there was one that comes in around the pivot 134 that should certainly be of interest. We went through a couple levels just below that yesterday Around 130 and that would be ultimately where we close the week. This is what I want to see Can we confirm that we're going to push or you know break above here? and if not And I think we do push lower ultimately, but if we can drift lower down to 130 I know it's 61 ticks away. I think from a medium term or you know couple day trade Perspective, that's a lovely area to consider to get in trend line from the lows as well We would match up quite nicely with that and of course if we close the week below Not only is the trend line broken that key support as that would then potentially terms resistance again We can push low to the upside the high of This on almost reached yesterday, but the higher the fifth that's somewhere to have marked up as well 130 84 Finishing up on oil before quick-looking that that's what it's doing on the open 50 50 is my line in the sand Didn't quite make it yesterday morning Finish the week above there, you know You'd be very relatively happy to still be long whether you want to hold that risk over the weekend or not There's another question What you'd be really happy with is if we can get above 52 bucks That would be really nice for any oil balls If you're you know bearish if we can get back below that 50 50 fantastic opportunity Maybe to get short to target some of these lows that we've already had this year Looking intraday at the little range that we're in. It's this, you know markets open up relatively quiet It's almost waiting for Sorry something to to happen price is getting squeezed in here from those loads of breaker. That is potentially an opportunity Or a break of the upside as well But range band trade this may not happen really until the afternoon quick. Look at the Dax to wrap it Quiet trending lower from those highs much like the US expertise as well See if we can get a bit of a trend on there from that high It's respected enough little false break on the open understandably to keep a watch on that a break above there And it could lead to another another person Unbelievably still that would be another all-time high for that's what can stop You know this market and let alone the US equities as well But a couple levels below to see how marked up as well the lines in the sand for the facts I mean, I would argue this is as good as any here 13,712 be looking at that as well any questions as usual Please do let us know good luck to the guys and saves to today trading competition. This is where heroes are made There's no prizes coming second apart. Well, there is a prize coming last my last wooden spoon But we all know it's all about getting that first prize 20 contracts limit on each product for futures Likely gonna be a bloodbath, but I hope everyone has a good day and I look forward to catching you all next week You